(CNN) -- Finding, retaining and developing top-quality workers is every boss's dream. Not only does it give corporations a competitive edge, it also ensures that they keep ahead of rivals over time.

With "jobs for life" fast disappearing and the "project-based economy" on the rise, firms are now adopting innovative ways to engage and motivate staff to ensure that they stay.

Some companies are using a relatively new U.S.-style approach to executive recruitment and development called "talent management."

Talent management involves much of what human resource departments have done in the past -- but this time the focus has shifted.

According to experts, the new formula involves creating attractive support systems for the people whom corporations want to nurture.

This is also being balanced with fresh challenges for long-term staff, better employee feedback, greater clarity over career paths and direction, more visible role models in the workplace, as well as flexible contracts.

"They have ways of working which do not necessarily fit comfortably into the patterns that most people might be used to."

Part of the problem that many companies face is defining what constitutes a talented person.

Work performance and feedback is one way of gauging how talented an employee is, but in many firms this is poorly executed.

In a recent U.S. survey of 1,190 workers, only 30 percent of employees give their performance management system good marks in helping them to improve their performance.

"A company's success is contingent on the success of its employees," said Scott Cohen of Watson Wyatt, the human resource company which conducted the poll.

"In the end, the companies that make the needed changes to their performance management process will generate significant competitive advantages."

Increasing amounts of incoming resumes, shortage of qualified specialists and jam-packed e-mail boxes in human resource departments are also making the recruitment of top executives harder and more expensive.

"Many organizations today are headed by (those) who joined as graduate recruits. This should convince people that investing in talent is definitely worthwhile," says Smith.

Smith also believes the reason why the science of talent prediction is not better is because it is hard to predict the changing needs of corporations over time.

"Characteristics that are driving my organization today might be completely different from (those) that were driving my organization 10 years ago," he explains.

"To second guess the qualities that are really going to be critical in the future is a bit of a crystal ball game."